Compilation of the Social Security Laws

Sec. 474. [42 U.S.C. 674](a) For each quarter
beginning after September 30, 1980, each State which has a plan approved
under this part shall be entitled to a payment equal to the sum of—

(1) an amount equal
to the Federal medical assistance percentage (which shall be as defined
in section 1905(b), in the case of a State other than the District
of Columbia, or 70 percent, in the case of the District of Columbia)
of the total amount expended during such quarter as foster care maintenance
payments under section 472 for children in foster family homes or child-care institutions
(or, with respect to such payments made during such quarter under
a cooperative agreement or contract entered into by the State and
an Indian tribe, tribal organization, or tribal consortium for the
administration or payment of funds under this part, an amount equal
to the Federal medical assistance percentage that would apply under
section 479B(d) (in this paragraph
referred to as the “tribal FMAP”) if such Indian tribe,
tribal organization, or tribal consortium made such payments under
a program operated under that section, unless the tribal FMAP is less
than the Federal medical assistance percentage that applies to the
State); plus

(2) an amount equal
to the Federal medical assistance percentage (which shall be as defined
in section 1905(b), in the case of a State other than the District
of Columbia, or 70 percent, in the case of the District of Columbia)
of the total amount expended during such quarter as adoption assistance
payments under section 473 pursuant to adoption assistance agreements (or, with
respect to such payments made during such quarter under a cooperative
agreement or contract entered into by the State and an Indian tribe,
tribal organization, or tribal consortium for the administration or
payment of funds under this part, an amount equal to the Federal medical
assistance percentage that would apply under section 479B(d) (in this paragraph referred
to as the “tribal FMAP”) if such Indian tribe, tribal
organization, or tribal consortium made such payments under a program
operated under that section, unless the tribal FMAP is less than the
Federal medical assistance percentage that applies to the State);
plus

(3) subject to section 472(i) an amount equal
to the sum of the following proportions of the total amounts expended
during such quarter as found necessary by the Secretary for the provision
of child placement services and for the proper and efficient administration
of the State plan—

(A) 75 per centum
of so much of such expenditures as are for the training (including
both short-and long-term training at educational institutions through
grants to such institutions or by direct financial assistance to students
enrolled in such institutions) of personnel employed or preparing
for employment by the State agency or by the local agency administering
the plan in the political subdivision,

(B) 75 percent
of so much of such expenditures (including travel and per diem expenses)
as are for the short-term training of current or prospective parents
or relative guardians, the members of the staff of State-licensed
or State-approved child care institutions providing care, or State-licensed
or State-approved child welfare agencies providing services, to foster
or adoptive children receiving assistance under this part, and members
of the staff of abuse and neglect courts, agency attorneys, attorneys
representing children or parents, guardians ad litem, or other court-appointed
special advocates representing children in proceedings of such courts,
in ways that increase the ability of such current or prospective parents,
guardians, staff members, institutions, attorneys and advocates to
provide support and assistance to foster and adopted children, and
children living with relative guardians whether incurred directly
by the State or by contract,

(C) 50 percent
of so much of such expenditures as are for the planning, design, development,
or installation of statewide mechanized data collection and information
retrieval systems (including 50 percent of the full amount of expenditures
for hardware components for such systems) but only to the extent that
such systems—

(ii) to the extent
practicable, are capable of interfacing with the State data collection
system that collects information relating to child abuse and neglect;

(iii) to the extent
practicable, have the capability of interfacing with, and retrieving
information from, the State data collection system that collects information
relating to the eligibility of individuals under part A (for the purposes
of facilitating verification of eligibility of foster children); and

(iv) are determined
by the Secretary to be likely to provide more efficient, economical,
and effective administration of the programs carried out under a State
plan approved under part B or this part; and

(D) 50 percent
of so much of such expenditures as are for the operation of the statewide
mechanized data collection and information retrieval systems referred
to in subparagraph (C); and

(i) 80 percent of
the amount expended by the State during the fiscal year in which the
quarter occurs to carry out programs in accordance with the State
application approved under section 477(b) for the period in which the quarter
occurs (including any amendment that meets the requirements of section 477(b)(5)); or

(ii) the amount allotted
to the State under section 477(c)(1) for the fiscal year in which
the quarter occurs, reduced by the total of the amounts payable to
the State under this paragraph for all prior quarters in the fiscal
year; exceeds

(B) the total
amount of any penalties assessed against the State under section 477(e) during the
fiscal year in which the quarter occurs; plus

(5) an amount equal
to the percentage by which the expenditures referred to in paragraph
(2) of this subsection are reimbursed of the total amount expended
during such quarter as kinship guardianship assistance payments under
section 473(d) pursuant to kinship guardianship assistance agreements.

(b)(1) The Secretary shall,
prior to the beginning of each quarter, estimate the amount to which
a State will be entitled under subsection (a) for such quarter, such
estimates to be based on (A) a report filed by the State containing
its estimate of the total sum to be expended in such quarter in accordance
with subsection (a), and stating the amount appropriated or made available
by the State and its political subdivisions for such expenditures
in such quarter, and if such amount is less than the State’s
proportionate share of the total sum of such estimated expenditures,
the source or sources from which the difference is expected to be
derived, (B) records showing the number of children in the State receiving
assistance under this part, and (C) such other investigation as the
Secretary may find necessary.

(2) The Secretary shall
then pay to the State, in such installments as he may determine, the
amounts so estimated, reduced or increased to the extent of any overpayment
or underpayment which the Secretary determines was made under this
section to such State for any prior quarter and with respect to which
adjustment has not already been made under this subsection.

(3) The pro rata share
to which the United States is equitably entitled, as determined by
the Secretary, of the net amount recovered during any quarter by the
State or any political subdivision thereof with respect to foster
care and adoption assistance furnished under the State plan shall
be considered an overpayment to be adjusted under this subsection.

(4)(A) Within 60
days after receipt of a State claim for expenditures pursuant to subsection
(a), the Secretary shall allow, disallow, or defer such claim.

(B) Within 15
days after a decision to defer such a State claim, the Secretary shall
notify the State of the reasons for the deferral and of the additional
information necessary to determine the allowability of the claim.

(C) Within 90
days after receiving such necessary information (in readily reviewable
form), the Secretary shall—

(i) disallow the claim,
if able to complete the review and determine that the claim is not
allowable, or

(ii) in any other
case, allow the claim, subject to disallowance (as necessary)—

(I) upon completion
of the review, if it is determined that the claim is not allowable;
or

(II) on the
basis of findings of an audit or financial management review.

(c) Automated
Data Collection Expenditures.—The Secretary
shall treat as necessary for the proper and efficient administration
of the State plan all expenditures of a State necessary in order for
the State to plan, design, develop, install, and operate data collection
and information retrieval systems described in subsection (a)(3)(C),
without regard to whether the systems may be used with respect to
foster or adoptive children other than those on behalf of whom foster
care maintenance payments or adoption assistance payments may be made
under this part.

(d)(1) If, during any
quarter of a fiscal year, a State’s program operated under this
part is found, as a result of a review conducted under section 1123A, or otherwise,
to have violated paragraph (18) or (23) of section 471(a) with respect
to a person or to have failed to implement a corrective action plan
within a period of time not to exceed 6 months with respect to such
violation, then, notwithstanding subsection (a) of this section and
any regulations promulgated under section 1123A(b)(3), the Secretary shall
reduce the amount otherwise payable to the State under this part,
for that fiscal year quarter and for any subsequent quarter of such
fiscal year, until the State program is found, as a result of a subsequent
review under section 1123A, to have implemented a corrective action plan with respect
to such violation, by—

(A) 2 percent
of such otherwise payable amount, in the case of the 1st such finding
for the fiscal year with respect to the State;

(B) 3 percent
of such otherwise payable amount, in the case of the 2nd such finding
for the fiscal year with respect to the State; or

(C) 5 percent
of such otherwise payable amount, in the case of the 3rd or subsequent
such finding for the fiscal year with respect to the State.

In imposing the penalties described in this paragraph, the Secretary
shall not reduce any fiscal year payment to a State by more than 5
percent

(2) Any other entity
which is in a State that receives funds under this part and which
violates paragraph (18) or (23) of section 471(a) during a fiscal year quarter
with respect to any person shall remit to the Secretary all funds
that were paid by the State to the entity during the quarter from
such funds.

(3)(A) Any individual
who is aggrieved by a violation of section 471(a)(18) by a State or other entity
may bring an action seeking relief from the State or other entity
in any United States district court.

(B) An action
under this paragraph may not be brought more than 2 years after the
date the alleged violation occurred.

(4) This subsection
shall not be construed to affect the application of the Indian Child
Welfare Act of 1978[230].

(e) Discretionary
Grants for Educational and Training Vouchers for Youths Aging out
of Foster Care.—From amounts appropriated
pursuant to section 477(h)(2), the Secretary may make a grant to a State with
a plan approved under this part, for a calendar quarter, in an amount
equal to the lesser of—

(1) 80 percent of the
amounts expended by the State during the quarter to carry out programs
for the purposes described in section 477(a)(6); or

(2) the amount, if
any, allotted to the State under section 477(c)(3) for the fiscal year in which
the quarter occurs, reduced by the total of the amounts payable to
the State under this subsection for such purposes for all prior quarters
in the fiscal year.

(f)(1) If the Secretary
finds that a State has failed to submit to the Secretary data, as
required by regulation, for the data collection system implemented
under section 479, the Secretary shall, within 30 days after the date by which the
data was due to be so submitted, notify the State of the failure and
that payments to the State under this part will be reduced if the
State fails to submit the data, as so required, within 6 months after
the date the data was originally due to be so submitted.

(2) If the Secretary
finds that the State has failed to submit the data, as so required,
by the end of the 6-month period referred to in paragraph (1) of this
subsection, then, notwithstanding subsection (a) of this section and
any regulations promulgated under section 1123A(b)(3), the Secretary shall
reduce the amounts otherwise payable to the State under this part,
for each quarter ending in the 6-month period (and each quarter ending
in each subsequent consecutively occurring 6-month period until the
Secretary finds that the State has submitted the data, as so required),
by—

(A) 1/6 of 1 percent of the total amount expended
by the State for administration of foster care activities under the
State plan approved under this part in the quarter so ending, in the
case of the 1st 6-month period during which the failure continues;
or

(B) 1/4 of 1 percent of the total amount
so expended, in the case of the 2nd or any subsequent such 6-month
period.

(g) For purposes of
this part, after the termination of a demonstration project relating
to guardianship conducted by a State under section 1130, the expenditures of the State for
the provision, to children who, as of September 30, 2008, were receiving
assistance or services under the project, of the same assistance and
services under the same terms and conditions that applied during the
conduct of the project, are deemed to be expenditures under the State
plan approved under this part.

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